The rising price of oil is recently becoming destructive issue a that our societies have to deal with. The impact of rising oil prices creates economic, as well as social problems. High oil prices can lead to substantial output reductions, decreasing nominal wages, increasing competitiveness in oil dependable businesses and unemployment. Furthermore, I, as a student, just realized that at our current consumption of crude oil and at our current status of known reserves, we have approximately 40 years of reserves remaining. Numerous people are aware of the price increases now and Under the right conditions, oil would sometimes seep up to the surface, but in our times, the search for new reserves is more costly and dangerous.
Making predictions into the future is not what this post is about. Suggesting alternative solution would be more appropriate in accordance with a position of student.
The appropriate choice fiscal policy will be the expansionary fiscal policy. In terms of adopting this policy, the government will attempt to increase the government spending and increasing net taxes. This transmission will increase boost aggregate demand, the economy will go back to potential output but at a much higher level of prices. Consequently, the unemployment will be reduced. Nevertheless, the more comprehensive policy adoption will be the mixture of monetary and fiscal policy, for example, increasing interest rates and government spending at the same time.
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답글삭제I agree your jounal. I think that fiscal policy will be done appropriately, and we sould try to decrease unnecessary oil. So, government can revive the economy and reduce unemployment.
답글삭제We can think of something new. When it comes to cutting price off, we could find another way easily. You know, developing alternative way is also very effective to reduce oil price. So what I want to say is that government should be carefully when dealing with this problem for a long time ;)
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